The AUD/USD currency pair recovered most of its opening losses and was trading marginally lower near 0.7240 during the early European session on Monday, following initial weakness due to a stronger US Dollar. The US Dollar Index (DXY) was up 0.26% at around 98.10 after US President Donald Trump rejected Iran's counter proposal, which included demands such as recognition of Tehran's authority over the Strait of Hormuz, compensation for war damages, and the release of frozen Iranian assets [1].
The Australian Dollar (AUD) showed resilience, trading firmly ahead of US President Trump's visit to China scheduled for May 13 to May 15. According to US officials cited by Reuters, President Trump and Chinese leader Xi Jinping are expected to discuss a range of issues, including Middle East conflicts, Taiwan, Artificial Intelligence (AI), nuclear weapons, and critical minerals. The article notes that a positive outcome from the Trump-Xi meeting would be favorable for the Australian Dollar, given Australia's economic reliance on exports to China [1].
In terms of performance, the AUD was the strongest against the New Zealand Dollar among major currencies. Technical analysis indicates that AUD/USD maintains a constructive bullish bias, with the spot price holding above the 20-period Exponential Moving Average (EMA) at 0.7167. The Relative Strength Index (RSI) is around 62, suggesting bullish momentum without overbought conditions, and supporting the case for further upside towards the 0.7300 level [1].
No explicit analyst opinions or forward-looking statements beyond the technical outlook and the potential impact of the Trump-Xi meeting were provided in the article.
CONCLUSION
The AUD/USD pair has rebounded from early losses, supported by technical strength and anticipation of the upcoming Trump-Xi summit. Market participants are watching for developments from the meeting, which could influence the Australian Dollar's trajectory given Australia's trade ties with China.